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10-28. ESTIMATING A COST FUNCTION, HIGH-LOW METHOD. Lynsay Detz is examining customer-service costs in the southern region of Clancey Products. Clancey Products has more than 200 separate electrical products that are sold with a 6-month guarantee of full repair or replacement with a new product. When a product is returned by a customer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 8-week period are as follows: 1. Plot the relationship between customer-service costs and number of service reports. Is the relationship economically plausible? 2. Use the high-low method to compute the cost function relating customer-service costs to the number of service reports. 3. What variables, in addition to number of service reports, might be cost drivers of weekly customer-service costs of Clancey Products? 10-28. ESTIMATING A COST FUNCTION, HIGH-LOW METHOD. Lynsay Detz is examining customer-service costs in the southern region of Clancey Products. Clancey Products has more than 200 separate electrical products that are sold with a 6-month guarantee of full repair or replacement with a new product. When a product is returned by a customer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 8-week period are as follows: 1. Plot the relationship between customer-service costs and number of service reports. Is the relationship economically plausible? 2. Use the high-low method to compute the cost function relating customer-service costs to the number of service reports. 3. What variables, in addition to number of service reports, might be cost drivers of weekly customer-service costs of Clancey Products